Global rate cuts: Are central banks bracing for economic calamity?

Europe and China slash interest rates, and Britain says it will essentially print money — raising fears that the world's top bankers are entering "panic mode"

Mario Draghi, president of the European Central Bank, announced that his bank was slashing interest rates from 1 percent to 0.75 percent, the lowest level in the ECB's 14-year history.
(Image credit: REUTERS/Alex Domanski)

In one wild hour on Thursday, central banks in Europe and China slashed interest rates, hoping to encourage businesses and consumers to borrow — and spend — more. At the same time, the Bank of England renewed an economic stimulus program it had suspended just two months ago. And here in the U.S., it was only two weeks ago that the Federal Reserve announced that it would extend a similar effort. Central bankers insist the moves weren't coordinated. Still, is this flurry of activity a sign that the world's financial leaders are starting to panic in the face of a scary global slowdown? Here, a brief guide:

What exactly did the central banks do?

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us